Fed holds rates steady, sees no cuts in 2019

[kpete]

Source: CNBC

The Federal Open Market Committee voted 9-1 to keep the benchmark rate in a target range of 2.25% to 2.5%.
The Fed dropped the word “patient” to describe its approach to policy.
The central bank also left the door open somewhat to future cuts: “In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.?



Read more: Linkhttps://www.cnbc.com/2019/06/19/fed-decision-fed-leaves-rates-unchanged.html to source

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Link to tweet

[mahatmakanejeeves]

1. Chairman to be fired in 5 ... 4 ... 3 ....

Trump hints at firing Powell ahead of Fed meeting: 'Let's see what he does'
By Megan Henney | Published June 19, 2019 | Donald Trump | FOXBusiness

[oldsoftie]

8. I dont think he can fire the chairman. He has a 4 yr term.

i think it would be up to Congress

[FBaggins]

10. He CAN fire the chairman

but not for disagreements on policy. I doubt any court would consider that "for cause".

[still_one]

2. Actually it is an open question about rate cuts in 2019

[FBaggins]

4. Indeed... it's closer to likely than not

The Fed in recent years has tended to modify their language one cycle prior to changing the rate itself.

In fact the odds of a mid-Sept rate cut have jumped to almost 80% on today's news... and almost 95% chance of at least one cut by the end of the year.

[Tiggeroshii]

5. They should have raised rates a little bit more when the economy was at its' peak

Now that we have these warning signs, any cuts will lead to the probability of not havining a lot of tools to issue relief when the economy does stagnate.

[FBaggins]

7. In that model, they would be risking accelerating the downturn

However - outside of the political spin conversation - the current scenario doesn't appear to be what most are assuming. They aren't talking about the economy stagnating... they're talking about inflation still running too far below their target.

[Turbineguy]

3. It must be galling

for somebody like Powell to be criticized by an idiot like trump.

[House of Roberts]

6. I'm skeptical there will be cuts later this year.

If food prices go up due to farms being flooded and unable to plant in time, we may see hikes to dampen the inevitable inflation, as it occurs.

[FBaggins]

9. You're likely correct that they're more concerned about inflation currently

However - price changes due to short-term supply issues are not properly "inflation" and wouldn't likely affect their decision making.

Moreover... those changes are already priced in. From May 10th to June 17th the price of corn futures climbed almost 30% to the highest point in five years. Wheat saw a similar increase. Predictably, beef prices are falling as farmers sell cattle they're now worried about feeding.